EX-10.19






Exhibit 10.19




US POWER GENERATING COMPANY




2007 STOCK INCENTIVE PLAN




 









 






US POWER GENERATING COMPANY




2007 STOCK INCENTIVE PLAN




TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	1.
	 	PURPOSE.	 	 	1	 
	 
	 	 	 	 	 	 
	2.
	 	DEFINITIONS.	 	 	1	 
	 
	 	 	 	 	 	 
	3.
	 	ADMINISTRATION.	 	 	3	 
	 
	 	 	 	 	 	 
	4.
	 	STOCK SUBJECT TO PLAN.	 	 	4	 
	 
	 	 	 	 	 	 
	5.
	 	ELIGIBILITY; PER-PERSON AWARD LIMITATIONS.	 	 	4	 
	 
	 	 	 	 	 	 
	6.
	 	SPECIFIC TERMS OF AWARDS.	 	 	5	 
	 
	 	 	 	 	 	 
	7.
	 	PERFORMANCE AWARDS.	 	 	9	 
	 
	 	 	 	 	 	 
	8.
	 	CERTAIN PROVISIONS APPLICABLE TO AWARDS.	 	 	11	 
	 
	 	 	 	 	 	 
	9.
	 	CHANGE IN CONTROL.	 	 	12	 
	 
	 	 	 	 	 	 
	10.
	 	ADDITIONAL AWARD FORFEITURE PROVISIONS.	 	 	14	 
	 
	 	 	 	 	 	 
	11.
	 	GENERAL PROVISIONS.	 	 	16	 






 









 





US POWER GENERATING COMPANY




2007 STOCK INCENTIVE PLAN




     1. Purpose. The purpose of this 2007 Stock Incentive Plan (the “Plan”) is to aid US Power
Generating Company, a Delaware corporation (together with its successors and assigns, the
“Company”), in attracting, retaining, motivating and rewarding employees, non-employee directors,
and other service providers of the Company or its subsidiaries or Affiliates, to provide for
equitable and competitive compensation opportunities, to recognize individual contributions and
reward achievement of Company goals, and promote the creation of long-term value for stockholders
by closely aligning the interests of Participants with those of stockholders. The Plan authorizes
equity-based and cash-based incentives for Participants.



     2. Definitions. In addition to the terms defined in Section 1 above and elsewhere in the
Plan, the following capitalized terms used in the Plan have the respective meanings set forth in
this Section:



          (a) “Affiliate” of any particular person means any other person controlling, controlled by or
under common control with such particular person, where “control” means the possession, directly or
indirectly, of the power to direct the management and policies of a person whether through the
ownership of voting securities or otherwise; provided that any reference to the Company and
its Affiliates in this Plan shall not include Madison Dearborn Partners, LLC (or similar investor),
its Affiliates and any other portfolio company of Madison Dearborn Partners, LLC (or any similar
investor) or any such Affiliate (other than a portfolio company formed for the purpose of, directly
or indirectly, holding the equity securities of the Company).




          (b) “Annual Limit” shall have the meaning specified in Section 5(b).




          (c) “Award” means any Option, SAR, Restricted Stock, Deferred Stock (which includes restricted
stock units), Stock granted as a bonus or in lieu of another award, Dividend Equivalent, Other
Stock-Based Award, Performance Award, together with any related right or interest, granted to a
Participant under the Plan.




          (d) “Beneficiary” means the legal representatives of the Participant’s estate entitled by will
or the laws of descent and distribution to receive the benefits under a Participant’s Award upon a
Participant’s death, provided that, if and to the extent authorized by the Committee, a Participant
may be permitted to designate a Beneficiary, in which case the “Beneficiary” instead will be the
person, persons, trust or trusts (if any are then surviving) which have been designated by the
Participant in his or her most recent written and duly filed beneficiary designation to receive the
benefits specified under the Participant’s Award upon such Participant’s death. Unless otherwise
determined by the Committee, any designation of a Beneficiary other than a Participant’s spouse
shall be subject to the written consent of such spouse.




          (e) “Board” means the Company’s Board of Directors.




          (f) “Cause” has the meaning as defined in any employment agreement, or, if none, severance or
separation policy, applicable to Employee and in effect at the time of Employee’s Termination of
Employment or, if there is no such employment agreement or policy, Cause shall mean (1) the willful
malfeasance or willful misconduct by Employee in connection with his or her employment, (2)
continuing failure to perform such material duties as are requested by any employee to whom
Employee reports, directly or indirectly, or by the board of directors of either the Company or the
subsidiary or Affiliate that employs Employee, (3) the failure by Employee to comply with material
policies of the Company or his or her employer applicable to Employee, or (4) the commission by
Employee of (i) a felony or (ii) a misdemeanor involving moral turpitude.




 









 





          (g) “Code” means the Internal Revenue Code of 1986, as amended. References to any provision
of the Code or regulation thereunder shall include any successor provisions and regulations and
also includes any applicable guidance or pronouncement of the Department of the Treasury and
Internal Revenue Service.




          (h) “Committee” means the Compensation Committee of the Board. The composition and governance
of the Committee shall be established in the Committee’s Charter or equivalent authorization as
approved from time to time by the Board, and shall be subject to any other applicable corporate
governance documents of the Company. No action of the Committee shall be void or deemed to be
without authority due to the failure of any member, at the time the action was taken, to meet any
qualification standard set forth in the Committee Charter or this Plan. The full Board may perform
any function of the Committee hereunder (except to the extent limited under any stock exchange or
marketplace rules as may then be applicable), in which case the term “Committee” shall refer to the
Board.




          (i) “Deferred Stock” means a right, granted under this Plan, to receive Stock or other Awards
or a combination thereof at the end of a specified period, subject to any vesting requirement as
may be specified by the Committee.




          (j) “Dividend Equivalent” means a right, granted under this Plan, to receive cash, Stock,
other Awards or other property equal in value to all or a specified portion of the dividends paid
with respect to a specified number of shares of Stock.




          (k) “Effective Date” means the effective date specified in Section 11(p).




          (l) “Eligible Person” means (i) an employee of the Company or any subsidiary or Affiliate,
including any executive officer or employee director of the Company or a subsidiary or Affiliate,
(ii) any person who has been offered employment by the Company or a subsidiary or Affiliate,
provided that such prospective employee may not receive any payment or exercise any right relating
to an Award until such person has commenced employment with the Company or a subsidiary or
Affiliate, and (iii) any non-employee director of the Company or a subsidiary. An employee on
leave of absence may be considered as still in the employ of the Company or a subsidiary or
Affiliate for purposes of eligibility for participation in the Plan.




          (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended. References to any
provision of the Exchange Act or rule (including a proposed rule) thereunder shall include any
successor provisions and rules.




          (n) “Fair Market Value” means the fair market value of Stock, Awards or other property as
determined in good faith by the Committee or under procedures established by the Committee. At any
time that the Company is not Public, the Fair Market Value referenced in setting the exercise price
or base price of any Non-409A Award that is an Option or SAR or in measuring the market value of
the underlying Stock at the time of exercise of a Non-409A Award that is an SAR shall conform to
requirements under Code Section 409A, including Treasury Regulation § 1.409A-1(b)(5)(iv)(B). At
any time the Company is Public, unless otherwise determined by the Committee, the Fair Market Value
of Stock on a given day shall be the closing sales price per share for such Stock as of the day of
determination (or, if there are no trades on that day, for the last preceding day on which there
were reported trades), as reported in a reliable trading reporting system or source designated by
the Committee.




          (o) “409A Award” means an Award that constitutes a deferral of compensation under Code Section
409A and regulations thereunder. “Non-409A Award” means an Award other than a 409A Award.
Although the Committee retains authority under the Plan to grant Options, SARs and Restricted Stock
on terms that will qualify those Awards as 409A Awards, Options, SARs, and Restricted Stock are
intended to be Non-409A Awards unless otherwise expressly specified by the Committee.




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          (p) “Incentive Stock Option” or “ISO” means any Option designated as an incentive stock option
within the meaning of Code Section 422 and qualifying thereunder.




          (q) “Option” means a right to purchase Stock granted under Section 6(b).




          (r) “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(h).




          (s) “Participant” means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible Person.




          (t) “Performance Award” means a conditional right, granted to a Participant under Sections
6(i) or 7, to receive cash, Stock or other Awards or payments.




          (u) “Public” means the status of the Company as a company with a class of common stock
registered under Section 12 of the Securities Exchange Act of 1934, as amended.




          (v) “Restricted Stock” means Stock granted under this Plan which is subject to certain
restrictions and to a risk of forfeiture.




          (w) “Stock” means the Company’s Common Stock, par value $0.0001 per share, and any other
equity securities of the Company that may be substituted or resubstituted for Stock pursuant to
Section 11(c).




          (x) “Stock Appreciation Rights” or “SAR” means a right granted to a Participant under Section
6(c).




     3. Administration.



          (a) Authority of the Committee. The Plan shall be administered by the Committee, which shall
have full and final authority, in each case subject to and consistent with the provisions of the
Plan, to select Eligible Persons to become Participants; to grant Awards; to determine the type and
number of Awards, the number of shares of Stock to which an Award may relate, the dates on which
Awards may be exercised and on which the risk of forfeiture or deferral period relating to Awards
shall lapse or terminate, the acceleration of any such dates (including in connection with a change
in control of the Company), the expiration date of any Award, whether, to what extent, and under
what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash,
Stock, other Awards, or other property, and other terms and conditions of, and all other matters
relating to, Awards; to prescribe documents evidencing or setting terms of Awards (such Award
documents need not be identical for each Participant or each Award), amendments thereto, and rules
and regulations for the administration of the Plan and amendments thereto; to construe and
interpret the Plan and Award documents and correct defects, supply omissions or reconcile
inconsistencies therein; and to make all other decisions and determinations as the Committee may
deem necessary or advisable for the administration of the Plan. Decisions of the Committee with
respect to the administration and interpretation of the Plan shall be final, conclusive, and
binding upon all persons interested in the Plan, including Participants, Beneficiaries, transferees
under Section 11(b) and other persons claiming rights from or through a Participant, and
stockholders.




          (b) Manner of Exercise of Committee Authority. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed as limiting any
power or authority of the Committee. The Committee may act through subcommittees, in which case
the subcommittee shall be subject to and have authority under the charter applicable to the
Committee, and the acts of the subcommittee shall be deemed to be acts of the Committee hereunder.
The Committee may delegate to one or more officers or




3









 




managers of the Company or any subsidiary or Affiliate, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform such functions, including
administrative functions, as the Committee may determine, to the extent that such delegation is
permitted under Section 157 and other applicable provisions of the Delaware General Corporation
Law, and, at any time that the Company is Public, (i) will not result in the loss of an exemption
under Rule 16b-3(d) for Awards granted to Participants subject to Section 16 of the Exchange Act in
respect of the Company, (ii) will not cause Awards intended to qualify as “performance-based
compensation” under Code Section 162(m) to fail to so qualify, and (iii) will not result in a
related-party transaction with an executive officer then required to be disclosed under Item 404(a)
of Regulation S-K (in accordance with Instruction 5.a.ii thereunder) under the Exchange Act.




          (c) Limitation of Liability. The Committee and each member thereof, and any person acting
pursuant to authority delegated by the Committee, shall be entitled, in good faith, to rely or act
upon any report or other information furnished by any executive officer, other officer or employee
of the Company or a subsidiary or Affiliate, the Company’s independent auditors, consultants or any
other agents assisting in the administration of the Plan. Members of the Committee, any person
acting pursuant to authority delegated by the Committee, and any officer or employee of the Company
or a subsidiary or Affiliate acting at the direction or on behalf of the Committee or a delegee
shall not be personally liable for any action or determination taken or made in good faith with
respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected
by the Company with respect to any such action or determination.




     4. Stock Subject To Plan.



          (a) Overall Number of Shares Available for Delivery. Subject to adjustment as provided in
Section 11(c), the total number of shares of Stock reserved and available for delivery in
connection with Awards under the Plan shall be 7,470,000 shares of Stock. Any shares of Stock
delivered under the Plan shall consist of authorized and unissued shares or treasury shares.




          (b) Share Counting Rules. The Committee may adopt reasonable counting procedures to ensure
appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute
awards) and make adjustments in accordance with this Section 4(b). Shares shall be counted against
those reserved to the extent such shares have been delivered and are no longer subject to a risk of
forfeiture. Accordingly, (i) to the extent that an Award is canceled, expired, forfeited, settled
in cash, settled by delivery of fewer shares than the number underlying the Award, or otherwise
terminated without delivery of shares to the Participant, the shares retained by or returned to the
Company will not be deemed to have been delivered under the Plan, and will be available for Awards
under the Plan; and (ii) shares that are withheld from such an Award or separately surrendered by
the Participant in payment of the exercise or purchase price or taxes relating to such an Award
shall be deemed to constitute shares not delivered and will be available under the Plan. The
Committee may determine that Awards may be outstanding that relate to more shares than the
aggregate remaining available under the Plan so long as Awards will not in fact result in delivery
and vesting of shares in excess of the number then available under the Plan. In addition, in the
case of any Award granted in assumption of or in substitution for an award of a company or business
acquired by the Company or a subsidiary or Affiliate or with which the Company or a subsidiary or
Affiliate combines, shares delivered or deliverable in connection with such assumed or substitute
Award shall not be counted against the number of shares reserved under the Plan.




     5. Eligibility; Per-Person Award Limitations.



          (a) Eligibility. Awards may be granted under the Plan only to Eligible Persons. Holders of
awards granted by a company or business acquired by the Company or a subsidiary or Affiliate, or
with which the Company or a subsidiary or Affiliate combines, are




4









 




eligible for grants of substitute awards granted in assumption of or in substitution for such
outstanding awards previously granted under the Plan in connection with such acquisition or
combination transaction.




          (b) Per-Person Award Limitations. The per-person limitations in this Section 5(b) shall apply
in each calendar year during any part of which the Plan is in effect and in which or before which
the stockholders of the Company, at a time the Company is Public, have approved the material terms
of this Plan including these per-person limitations (but shall not limit grants in any earlier
years). The grant of Awards intended to qualify as “performance-based compensation” under Code
Section 162(m) under the Plan to an Eligible Person may not exceed the Participant’s Annual Limit.
A Participant’s Annual Limit, in any year during any part of which the Participant is then eligible
under the Plan, shall equal 10% of the number of shares reserved under Section 4(a) at the
Effective Date, subject to adjustment as provided in Section 11(c). In the case of an Award which
is not valued at grant in a way in which the limitation on shares set forth in the preceding
sentence would operate as an effective limitation satisfying applicable law (including Treasury
Regulation § 1.162-27(e)(4)), an Eligible Person may not be granted Awards authorizing the earning
during any calendar year of an amount that exceeds the Eligible Person’s Annual Limit, which for
this purpose shall equal $10 million plus the amount of the Eligible Person’s unused cash Annual
Limit as of the close of the previous year (this limitation is separate and not affected by the
number of Awards granted during such calendar year subject to the limitation in the preceding
sentence). For this purpose, (i) “earning” means satisfying performance conditions so that an
amount becomes payable, without regard to whether it is to be paid currently or on a deferred basis
or continues to be subject to any service requirement or other non-performance condition, (ii) a
Participant’s Annual Limit is used to the extent an amount or number of shares may be potentially
earned or paid under an Award, regardless of whether such amount or shares are in fact earned or
paid, and (iii) the Annual Limit applies to Dividend Equivalents under Section 6(g) only if such
Dividend Equivalents are granted separately from and not as a feature of another Award.




     6. Specific Terms of Awards.



          (a) General. Awards may be granted on the terms and conditions set forth in this Section 6.
In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or
thereafter (subject to Sections 11(e) and 11(k)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment or service by the
Participant and terms permitting a Participant to make elections relating to his or her Award. The
Committee shall retain full power and discretion with respect to any term or condition of an Award
that is not mandatory under the Plan, subject to Sections 11(e) and 11(k) and the terms of the
Award agreement. The Committee shall require the payment of lawful consideration for an Award to
the extent necessary to satisfy the requirements of the Delaware General Corporation Law, and may
otherwise require payment of consideration for an Award except as limited by the Plan.




          (b) Options. The Committee is authorized to grant Options to Participants on the following
terms and conditions:





     (i) Exercise Price. The exercise price per share of Stock purchasable under
an Option (including both ISOs and non-qualified Options) shall be determined by
the Committee, provided that such exercise price shall be not less than the Fair
Market Value of a share of Stock on the date of grant of such Option, subject to
Section 8(a). Notwithstanding the foregoing, any substitute award granted in
assumption of or in substitution for an outstanding award granted by a company or
business acquired by the Company or a subsidiary or Affiliate, or with which the
Company or a subsidiary or Affiliate combines may be granted with an exercise price
per share of Stock other than as



5









 






required above. No adjustment will be made for a dividend or other right for
which the record date is prior to the date on which the stock is issued, except as
provided in Section 11(c) of the Plan.




     (ii) Option Term; Time and Method of Exercise. The Committee shall determine
the term of each Option, provided that in no event shall the term of any Option
exceed a period of ten years from the date of grant. The Committee shall determine
the time or times at which or the circumstances under which an Option may be
exercised in whole or in part (including based on achievement of performance goals
and/or future service requirements), the methods by which such exercise price may
be paid or deemed to be paid and the form of such payment (subject to Sections
11(j) and 11(k)), including, without limitation, cash, Stock (including by
withholding Stock deliverable upon exercise), other Awards or awards granted under
other plans of the Company or any subsidiary or Affiliate, or other property
(including through broker-assisted “cashless exercise” arrangements, to the extent
permitted by applicable law), and the methods by or forms in which Stock will be
delivered or deemed to be delivered in satisfaction of Options to Participants
(including, in the case of 409A Awards, deferred delivery of shares subject to the
Option, as mandated by the Committee, with such deferred shares subject to any
vesting, forfeiture or other terms as the Committee may specify).




     (iii) ISOs. The terms of any ISO granted under the Plan shall comply in all
respects with the provisions of Code Section 422.



          (c) Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants on
the following terms and conditions:





     (i) Right to Payment. An SAR shall confer on the Participant to whom it is
granted a right to receive, upon exercise thereof, the excess of (A) the Fair
Market Value of one share of Stock on the date of exercise over (B) the grant price
of the SAR as determined by the Committee, which may be paid in cash or Stock, as
determined by the Committee at the time of grant.




     (ii) Exercise Price. The grant price of each SAR shall be not less than the
Fair Market Value of a share of Stock on the date of grant of such SAR.
Notwithstanding the foregoing, any substitute award granted in assumption of or in
substitution for an outstanding award granted by a company or business acquired by
the Company or a subsidiary or Affiliate, or with which the Company or a subsidiary
or Affiliate combines may be granted with an exercise price per share of Stock
other than as required above.




     (iii) Other Terms. The Committee shall determine the term of each SAR,
provided that in no event shall the term of an SAR exceed a period of ten years
from the date of grant. The Committee shall determine at the date of grant or
thereafter the time or times at which and the circumstances under which a SAR may
be exercised in whole or in part (including based on achievement of performance
goals and/or future service requirements), the method of exercise, method of
settlement, form of consideration payable in settlement, method by or forms in
which Stock will be delivered or deemed to be delivered to Participants, whether or
not a SAR shall be free-standing or in tandem or combination with any other Award,
and whether or not the SAR will be a 409A Award or Non-409A Award. The Committee
may require that an outstanding Option be exchanged for an SAR exercisable for
Stock having vesting, expiration, and other terms substantially the same as the
Option, so long as such exchange will not result in additional accounting expense
to the Company.



6









 





          (d) Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants
on the following terms and conditions:





     (i) Grant and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if any,
as the Committee may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances (including based on achievement
of performance goals and/or future service requirements), in such installments or
otherwise and under such other circumstances as the Committee may determine at the
date of grant or thereafter. Except to the extent restricted under the terms of
the Plan and any Award document relating to the Restricted Stock, a Participant
granted Restricted Stock shall have all of the rights of a stockholder, including
the right to vote the Restricted Stock and the right to receive dividends thereon
(subject to any mandatory reinvestment or other requirement imposed by the
Committee).




     (ii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment or service during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be forfeited
and reacquired by the Company; provided that the Committee may provide, by rule or
regulation or in any Award document, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Stock will lapse in
whole or in part, including in the event of terminations resulting from specified
causes.




     (iii) Certificates for Stock. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant, the
Committee may require that such certificates bear an appropriate legend referring
to the terms, conditions and restrictions applicable to such Restricted Stock, that
the Company retain physical possession of the certificates, and that the
Participant deliver a stock power to the Company, endorsed in blank, relating to
the Restricted Stock.




     (iv) Dividends and Splits. As a condition to the grant of Restricted Stock,
the Committee may require that any dividends paid on a share of Restricted Stock
shall be either (A) paid with respect to such Restricted Stock at the dividend
payment date in cash, in kind, or in a number of shares of unrestricted Stock
having a Fair Market Value equal to the amount of such dividends, or (B)
automatically reinvested in additional Restricted Stock or held in kind, which
shall be subject to the same terms as applied to the original Restricted Stock to
which it relates, or (C) deferred as to payment, either as a cash deferral or with
the amount or value thereof automatically deemed reinvested in shares of Deferred
Stock, other Awards or other investment vehicles, subject to such terms as the
Committee shall determine or permit a Participant to elect or (D) not paid in
respect of the Restricted Stock for any record date prior to vesting of the
Restricted Stock. Unless otherwise determined by the Committee, Stock distributed
in connection with a Stock split or Stock dividend, and other property distributed
as a dividend, shall be subject to restrictions and a risk of forfeiture to the
same extent as the Restricted Stock with respect to which such Stock or other
property has been distributed.



7









 





          (e) Deferred Stock. The Committee is authorized to grant Deferred Stock to Participants,
subject to the following terms and conditions:





     (i) Award and Restrictions. Issuance of Stock will occur upon expiration of
the deferral period specified for an Award of Deferred Stock by the Committee (or,
if permitted by the Committee, as elected by the Participant). In addition,
Deferred Stock shall be subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee may impose, which
restrictions may lapse at the expiration of the deferral period or at earlier
specified times (including based on achievement of performance goals and/or future
service requirements), separately or in combination, in installments or otherwise,
and under such other circumstances as the Committee may determine at the date of
grant or thereafter. Deferred Stock may be satisfied by delivery of Stock, other
Awards, or a combination thereof (subject to Section 11(k)), as determined by the
Committee at the date of grant or thereafter.




     (ii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment or service during the applicable deferral period or
portion thereof to which forfeiture conditions apply (as provided in the Award
document evidencing the Deferred Stock), Deferred Stock that is at that time
subject to such forfeiture conditions shall be forfeited; provided that the
Committee may provide, by rule or regulation or in any Award document, or may
determine in any individual case, that restrictions or forfeiture conditions
relating to Deferred Stock will lapse in whole or in part, including in the event
of terminations resulting from specified causes. Deferred Stock subject to a risk
of forfeiture may be called “restricted stock units” or otherwise designated by the
Committee.




     (iii) Dividend Equivalents. Unless otherwise determined by the Committee,
Dividend Equivalents on the specified number of shares of Stock covered by an Award
of Deferred Stock shall be either (A) paid with respect to such Deferred Stock at
the dividend payment date in cash or in shares of unrestricted Stock having a Fair
Market Value equal to the amount of such dividends, (B) deferred with respect to
such Deferred Stock, either as a cash deferral or with the amount or value thereof
automatically deemed reinvested in additional Deferred Stock, other Awards or other
investment vehicles having a Fair Market Value equal to the amount of such
dividends, as the Committee shall determine or permit a Participant to elect, or
(c) not paid in respect of the Deferred Stock prior to vesting of the Deferred
Stock.



          (f) Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized to grant to
Participants Stock as a bonus, or to grant Stock or other Awards in lieu of obligations of the
Company or a subsidiary or Affiliate to pay cash or deliver other property under the Plan or under
other plans or compensatory arrangements, subject to such terms as shall be determined by the
Committee.




          (g) Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a
Participant, which may be awarded on a free-standing basis or in connection with another Award.
The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or
shall be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles,
and subject to restrictions on transferability, risks of forfeiture and such other terms as the
Committee may specify.




          (h) Other Stock-Based Awards. The Committee is authorized, subject to limitations under
applicable law, to grant to Participants such other Awards that may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or




8









 




related to, Stock or factors that may influence the value of Stock, including, without
limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable
into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of
the Company or business units thereof or any other factors designated by the Committee, and Awards
valued by reference to the book value of Stock or the value of securities of or the performance of
specified subsidiaries or Affiliates or other business units. The Committee shall determine the
terms and conditions of such Awards. Stock delivered pursuant to an Award in the nature of a
purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for
at such times, by such methods, and in such forms, including, without limitation, cash, Stock,
other Awards, notes, or other property, as the Committee shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, may also be granted pursuant to this
Section 6(h).




          (i) Performance Awards. Performance Awards, denominated in cash or in Stock or other Awards,
may be granted by the Committee in accordance with Section 7.




     7. Performance Awards.



          (a) Performance Awards Generally. Performance Awards may be denominated as a cash amount,
number of shares of Stock, or specified number of other Awards (or a combination) which may be
earned upon achievement or satisfaction of performance conditions specified by the Committee. In
addition, the Committee may specify that any other Award shall constitute a Performance Award by
conditioning the right of a Participant to exercise the Award or have it settled, and the timing
thereof, upon achievement or satisfaction of such performance conditions as may be specified by the
Committee. The Committee may use such business criteria and other measures of performance as it
may deem appropriate in establishing any performance conditions, and may exercise its discretion to
reduce or increase the amounts payable under any Award subject to performance conditions, except as
limited under Sections 7(b) and 7(c) in the case of a Performance Award intended to qualify as
“performance-based compensation” under Code Section 162(m).




          (b) Performance Awards Intended To Qualify Under Code Section 162(m). The provisions of this
Section 7(b) shall apply to grants of Awards after the stockholders of the Company, at a time the
Company is Public, have approved the material terms of this Plan including the business criteria
specified in Section 7(b)(ii) below (but shall not apply to Performance Awards granted prior to
such approval unless otherwise determined by the Committee). If, at a time that this Section 7(b)
is applicable, the Committee determines that a Performance Award to be granted to an Eligible
Person should qualify as “performance-based compensation” for purposes of Code Section 162(m) in
order to preserve the ability of the Company to claim income tax deductions for compensation
resulting from such Award, the grant, exercise and/or settlement of such Performance Award shall be
contingent upon achievement of a preestablished performance goal and other terms set forth in this
Section 7(b).





     (i) Performance Goal Generally. The performance goal for such Performance
Awards shall consist of one or more business criteria and a targeted level or
levels of performance with respect to each of such criteria, as specified by the
Committee consistent with this Section 7(b). The performance goal shall be
objective and shall otherwise meet the requirements of Code Section 162(m) and
regulations thereunder, including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance
goals being “substantially uncertain.” The Committee may determine that such
Performance Awards shall be granted, exercised and/or settled upon achievement of
any one performance goal or that two or more of the performance goals must be
achieved as a condition to grant, exercise and/or settlement of such Performance
Awards. Performance goals



9









 






may differ for Performance Awards granted to any one Participant or to
different Participants.




     (ii) Business Criteria. One or more of the following business criteria for
the Company, on a consolidated basis, and/or for specified subsidiaries or
Affiliates or other business units of the Company shall be used by the Committee in
establishing performance goals for such Performance Awards: (1) gross revenue,
operating revenues or other revenues or sales measures; (2) operating income,
earnings from operations, earnings before or after taxes, earnings before or after
interest, depreciation, amortization, or extraordinary or special items, which may
include mark-to-market adjustments or hedges and adjustments for share-based
compensation, (3) net income or net income per common share (basic or diluted); (4)
return on assets, return on investment, return on capital, or return on equity; (5)
cash flow, free cash flow, cash flow return on investment (discounted or
otherwise), or net cash provided by operations; (6) interest expense after taxes;
(7) economic profit or value created; (8) operating margin; (9) stock price or
total stockholder return; (10) returns on proprietary investments or on investment
assets under management, (11) expense management, (12) level of distributions, (13)
completion of capital and debt transactions, and (14) implementation, completion or
attainment of measurable objectives with respect to research, development, products
or projects, production volume levels, acquisitions and divestitures of
subsidiaries, Affiliates, joint ventures or other assets, market penetration, total
market capitalization and enterprise value, business retention, new product
generation, cost controls and targets (including cost of capital), environmental
performance, safety performance, plant operating performance, new asset
development, commercial performance including implementation of new hedges and
management of existing hedges, customer satisfaction, employee satisfaction, agency
ratings, management of employment practices and employee benefits, supervision of
litigation and information technology, implementation of business process controls,
and recruiting and retaining personnel. The targeted level or levels of
performance with respect to such business criteria may be established at such
levels and in such terms as the Committee may determine, in its discretion,
including in absolute terms, as a goal relative to performance in prior periods, or
as a goal compared to the performance of one or more comparable companies or
entities or an index covering multiple companies or an industry.




     (iii) Performance Period; Timing for Establishing Performance Goals.
Achievement of performance goals in respect of such Performance Awards shall be
measured over a performance period of up to one year or more than one year, as
specified by the Committee. A performance goal shall be established not later than
the earlier of (A) 90 days after the beginning of any performance period applicable
to such Performance Award or (B) the time 25% of such performance period has
elapsed.




     (iv) Performance Award Pool. The Committee may establish a Performance Award
pool, which shall be an unfunded pool, for purposes of measuring performance of the
Company in connection with Performance Awards. The amount of such Performance
Award pool shall be based upon the achievement of a performance goal or goals based
on one or more of the business criteria set forth in Section 7(b)(ii) during the
given performance period, as specified by the Committee in accordance with Section
7(b)(iii). The Committee may specify the amount of the Performance Award pool as a
percentage of any of such business criteria, a percentage thereof in excess of a
threshold amount, or as another amount which need not bear a strictly mathematical
relationship to such business criteria.



10









 






     (v) Settlement of Performance Awards; Other Terms. Settlement of Performance
Awards shall be in cash, Stock, other Awards or other property, in the discretion
of the Committee. The Committee may, in its discretion, increase or reduce the
amount of a settlement otherwise to be made in connection with such Performance
Awards, but may not exercise discretion to increase any such amount payable to a
Participant in respect of a Performance Award subject to this Section 7(b) beyond
the level of payment authorized for achievement of the performance goal specified
under this Section 7(b) based on the actual level of achievement of such goal. Any
settlement which changes the form of payment from that originally specified shall
be implemented in a manner such that the Performance Award and other related Awards
do not, solely for that reason, fail to qualify as “performance-based compensation”
for purposes of Code Section 162(m). The Committee shall specify the circumstances
in which such Performance Awards shall be paid or forfeited in the event of
termination of employment by the Participant or other event (including a change in
control) prior to the end of a performance period or settlement of such Performance
Awards.



          (c) Written Determinations. Determinations by the Committee relating to Awards granted under
Section 7(b), including as to the establishment of performance goals, the amount potentially
payable in respect of Performance Awards, the level of actual achievement of the specified
performance goals relating to Performance Awards, and the amount of any final Performance Award,
shall be recorded in writing. Specifically, the Committee shall certify in writing, in a manner
conforming to applicable regulations under Section 162(m), prior to settlement of each such Award
granted under Section 7(b), that the performance objective relating to the Performance Award and
other material terms of the Award upon which settlement of the Award was conditioned have been
satisfied.




     8. Certain Provisions Applicable To Awards.



          (a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan
may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with,
or in substitution or exchange for, any other Award or any award granted under another plan of the
Company, any subsidiary or Affiliate, or any business entity to be acquired by the Company or a
subsidiary or Affiliate, or any other right of a Participant to receive payment from the Company or
any subsidiary or Affiliate; provided, however, that a 409A Award may not be granted in tandem with
a Non-409A Award and any substitution or exchange shall be subject to the restriction on repricing
under Section 11(e) (if then applicable). Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different time from the grant of
such other Awards or awards. Subject to Sections 11(j) and (k) and subject to the restriction on
repricing under Section 11(e) (if then applicable), the Committee may determine that, in granting a
new Award, the in-the-money value or fair value of any surrendered Award or award or the fair value
of any other right to payment surrendered by the Participant may be applied to the purchase of any
other Award.




          (b) Term of Awards. The term of each Award shall be for such period as may be determined by
the Committee, subject to the express limitations set forth in Sections 6(b)(ii), 6(c)(iii) and 8
or elsewhere in the Plan.




          (c) Form and Timing of Payment under Awards; Deferrals. Subject to the terms of the Plan
(including Section 11(k)) and any applicable Award document, payments to be made by the Company or
a subsidiary or Affiliate upon the exercise or settlement of an Award may be made in such forms as
the Committee shall determine, including, without limitation, cash, Stock, other Awards or other
property, and may be made in a single payment or transfer, in installments, or on a deferred basis.
The settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with
such settlement, in the discretion of the Committee or upon occurrence of one or more specified
events, subject to Sections 11(j) and (k). Subject to




11









 




Section 11(k), installment or deferred payments may be required by the Committee (subject to
Section 11(e)) or permitted at the election of the Participant on terms and conditions established
by the Committee. Payments may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in
Stock. In the case of any 409A Award that is vested and no longer subject to a risk of forfeiture
(within the meaning of Code Section 83), such Award will be distributed to the Participant, upon
application of the Participant, if the Participant has had an unforeseeable emergency within the
meaning of Code Sections 409A(a)(2)(A)(vi) and 409A(a)(2)(B)(ii), in accordance with Section
409A(a)(2)(B)(ii).




          (d) Repurchase of Shares. Unless otherwise provided by the Committee in the Award document
agreement, at any time the Company is not Public, the Company may elect to repurchase shares
resulting from the exercise of an Option or SAR or settlement of an Award from an individual
terminating employment. In such case, the Company shall give notice to the Participant and shall
pay to the Participant an amount in cash equal to the Fair Market Value of the shares to be
repurchased on the effective date of the repurchase.




     9. Change in Control.



          (a) Effect of “Change in Control” on Non-Performance Based Awards. In the event of a “Change
in Control,” the following provisions shall apply to non-performance based Awards, including Awards
as to which performance conditions previously have been satisfied or are deemed satisfied under
Section 9(b), unless otherwise provided by the Committee in the Award document (subject to Section
11(e)):





     (i) All forfeiture conditions and other vesting restrictions applicable to
outstanding Awards shall lapse and such Awards shall be fully vested and payable
and settleable as of the time of the Change in Control without regard to such
vesting conditions, except to the extent of any waiver by the Participant or other
valid express election to defer beyond the Change in Control and subject to
applicable restrictions set forth in Sections 11(a) and 11(k);




     (ii) Any Award carrying a right to exercise that was not previously
exercisable and vested shall become fully exercisable and vested as of the time of
the Change in Control and shall remain exercisable and vested for the balance of
the stated term of such Award without regard to any termination of employment or
service by the Participant other than a termination for Cause, subject only to
applicable restrictions set forth in Sections 11(a) and 11(k); and




     (iii) All deferral of settlement and similar restrictions applicable to an
outstanding Award shall lapse and such Award shall be fully payable and settleable
as of the time of the Change in Control without regard to deferral and similar
restrictions, except to the extent of any valid express election to defer beyond
the Change in Control and subject to applicable restrictions set forth in Sections
11(a) and 11(k).



          (b) Effect of “Change in Control” on Performance-Based Awards. In the event of a “Change in
Control,” with respect to an outstanding Award subject to achievement of performance goals and
conditions, such performance goals and conditions shall be deemed to be met or exceeded if and to
the extent so provided by the Committee in the Award document governing such Award or other
agreement with the Participant. Unless otherwise specified in such Award agreement, vesting and
exercisability or settlement of such Award with regard to non-performance based terms will be as
provided in Section 9(a).




12









 





          (c) Definition of “Change in Control.” A “Change in Control” shall be deemed to have occurred
if, after the Effective Date, there shall have occurred any of the following:





     (i) Any “person,” as such term is used in Section 13(d) and 14(d) of the
Exchange Act (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), acquires voting
securities of the Company and immediately thereafter is a “Significant
Stockholder.” For purposes of this provision, a “Significant Stockholder” shall
mean a person who is the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 30% of the combined voting power of the Company’s then-outstanding voting
securities; provided, however, that the term “Significant Stockholder” shall not
include (A) Madison Dearborn Partners, LLC and its Affiliates (including a
successor entity in any corporate reorganization of Madison Dearborn Partners, LLC)
or (B) any person who was a beneficial owner of [___%] of the outstanding voting
securities of the Company at the Effective Date, or any person or persons who was
or becomes a fiduciary of any such person or persons (an “Existing Stockholder”),
including any group that may be formed which is comprised solely of Existing
Stockholders; and provided, further, that the term “Significant Stockholder” shall
not include any person who shall become the beneficial owner of the specified
percentage of the combined voting power of the Company’s then-outstanding voting
securities solely as a result of an acquisition by the Company of its voting
securities, until such time thereafter as such person shall become the beneficial
owner (other than by means of a stock dividend or stock split) of any additional
voting securities and at that time is a Significant Stockholder in accordance with
this Section 9(c)(i);




     (ii) During any period of two consecutive years commencing on or after the
Effective Date, at least a majority of the “Continuing Directors” cease for any
reason to be Continuing Directors. Continuing Directors include (A) individuals
who are Board members at the beginning of such two year period and (B) individuals
added as Board members during such two year period if such individual’s election by
the Board or nomination for election by the Company’s stockholders was approved by
a vote of at least two-thirds (2/3) of the directors who were (Y) then in office
and (Z) who were either were directors at the beginning of the period or whose
election or nomination for election was previously so approved (“new directors”);
provided however, that new directors shall not include any individual designated by
a person (as defined above) who has entered into an agreement with the Company to
effect a transaction described in subsections (i), (iii) or (iv) of this
definition;




     (iii) There is consummated a merger, consolidation, recapitalization, or
reorganization of the Company, or a reverse stock split of any class of voting
securities of the Company, other than any such transaction which would result in at
least 50% of the combined voting power of the voting securities of the Company or
the surviving entity outstanding immediately after such transaction being
beneficially owned by persons who together beneficially owned at least 90% of the
combined voting power of the voting securities of the Company outstanding
immediately prior to such transaction, with the relative voting power of each such
continuing holder compared to the voting power of each other continuing holder not
substantially altered as a result of the transaction; provided that, for purposes
of this paragraph (iii), such continuity of ownership (and preservation of relative
voting power) shall be deemed to be satisfied if the failure



13









 






to meet such 50% threshold (or to substantially preserve such relative voting
power) is due solely to the acquisition of voting securities by an employee benefit
plan of the Company or of such surviving entity or a subsidiary thereof; and




     (iv) The stockholders of the Company have approved a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets (or any transaction
having a similar effect); provided that, if consummation of the transaction
referred to in this Section 10(c)(iv) is subject, at the time of such approval by
stockholders, to the consent of any government or governmental agency or approval
of the stockholders of another entity or other material contingency, no Change in
Control shall occur until such time as such consent and approval has been obtained
and any other material contingency has been satisfied.


Notwithstanding the foregoing, any initial public offering of Stock shall not constitute a Change
in Control.




     10. Additional Award Forfeiture Provisions.



          (a) Forfeiture of Options and Other Awards and Gains Realized Upon Prior Option Exercises or
Award Settlements. Unless otherwise specified by the Committee in the Award document, each Award
granted hereunder shall be subject to the following additional forfeiture conditions, to which the
Participant, by accepting an Award hereunder, agrees. If any of the events specified in Section
10(b)(i), (ii), or (iii) occurs (a “Forfeiture Event”), all or part of the following forfeitures
may result, as determined by the Committee, and subject to the terms of any employment or similar
agreement with a Participant:





     (i) The unexercised portion of the Option, whether or not vested, and any
other Award not then settled (except for an Award that has not been settled solely
due to an elective deferral by the Participant and otherwise is not forfeitable in
the event of any termination of service of the Participant) will be immediately
forfeited and canceled upon the occurrence of the Forfeiture Event; and




     (ii) The Participant will be obligated to repay to the Company, in cash,
within five business days after demand is made therefor by the Company, the total
amount of Award Gain (as defined herein) realized by the Participant upon each
exercise of an Option or settlement of an Award (treating the date an Award would
be settled but for a Participant’s election to defer as a deemed settlement) that
occurred on or after (A) the date that is six months prior to the occurrence of the
Forfeiture Event, if the Forfeiture Event occurred while the Participant was
employed by the Company or a subsidiary or Affiliate, or (B) the date that is six
months prior to the date the Participant’s employment by the Company or a
subsidiary or Affiliate terminated, if the Forfeiture Event occurred after the
Participant ceased to be so employed. For purposes of this Section, the term
“Award Gain” shall mean (i), in respect of a given Option exercise, the product of
(X) the Fair Market Value per share of Stock at the date of such exercise (without
regard to any subsequent change in the market price of shares) minus the exercise
price times (Y) the number of shares as to which the Option was exercised at that
date, and (ii), in respect of any other settlement (or deemed settlement) of an
Award granted to the Participant, the Fair Market Value of the cash or Stock paid
or payable to Participant (i.e., disregarding any election to defer by the
Participant) less any cash or the Fair Market Value of any Stock or property (other
than an Award or award which would have itself then been



14









 






forfeitable hereunder and excluding any payment of tax withholding) paid by
the Participant to the Company as a condition of or in connection such settlement.



          (b) Events Triggering Forfeiture. Subject to the terms of an Award agreement and any
employment or similar agreement with a Participant, the forfeitures specified in Section 10(a) will
be triggered upon the occurrence of any one of the following Forfeiture Events at any time during
the Participant’s employment by the Company or a subsidiary or Affiliate or during the one-year
period following termination of such employment:





     (i) The Participant, acting alone or with others, directly or indirectly, (A)
prior to a Change in Control engages, either as employee, employer, consultant,
advisor, or director, or as an owner, investor, partner, or stockholder unless the
Participant’s interest is insubstantial, in any business in an area or region in
which the Company conducts business at the date the event occurs, which is directly
in competition with a business then conducted by the Company or a subsidiary or
Affiliate; (B) induces any customer or supplier of the Company or a subsidiary or
Affiliate, or other company with which the Company or a subsidiary or Affiliate has
a business relationship, to curtail, cancel, not renew, or not continue his or her
or its business with the Company or any subsidiary or Affiliate; or (C) induces, or
attempts to influence, any employee of or service provider to the Company or a
subsidiary or Affiliate to terminate such employment or service. The Committee
shall, in its discretion, determine which lines of business the Company conducts on
any particular date and which third parties may reasonably be deemed to be in
competition with the Company. For purposes of this Section 10(b)(i), a
Participant’s interest as a stockholder is insubstantial if it represents
beneficial ownership of less than three percent of the outstanding class of stock,
and a Participant’s interest as an owner, investor, or partner is insubstantial if
it represents ownership, as determined by the Committee in its discretion, of less
than three percent of the outstanding equity of the entity;




     (ii) The Participant discloses, uses, sells, or otherwise transfers, except in
the course of employment with or other service to the Company or any subsidiary or
Affiliate, any confidential or proprietary information of the Company or any
subsidiary or Affiliate, including but not limited to information regarding the
Company’s current and potential clients or customers, organization, employees,
finances, and methods of operations and investments, so long as such information
has not otherwise been disclosed to the public or is not otherwise in the public
domain, except as required by law or pursuant to legal process, or the Participant
makes statements or representations, or otherwise communicates, directly or
indirectly, in writing, orally, or otherwise, or takes any other action which may,
directly or indirectly, disparage or be damaging to the Company or any of its
subsidiaries or Affiliates or their respective officers, directors, employees,
advisors, businesses or reputations, except as required by law or pursuant to legal
process; or




     (iii) The Participant fails to cooperate with the Company or any subsidiary or
Affiliate by making himself or herself available to testify on behalf of the
Company or such subsidiary or Affiliate in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, or otherwise fails to assist the
Company or any subsidiary or Affiliate in any such action, suit, or proceeding by
providing information and meeting and consulting with members of management of,
other representatives of, or counsel to, the Company or such subsidiary or
Affiliate, as reasonably requested.



15









 





          (c) Forfeitures Resulting from Financial Reporting Misconduct. Subject to the terms of an
Award agreement and any employment or similar agreement with a Participant, if the Company is
required to prepare an accounting restatement due to the material noncompliance by the Company, as
a result of misconduct, with any financial reporting requirement under the securities laws, and if
a Participant knowingly caused or failed to prevent such misconduct, the Participant (i) shall
forfeit any Performance Award that was or would be deemed to be earned in whole or in part based on
performance during the period covered by the noncompliant financial report or during the 12-month
period following the first public issuance or filing with the Securities and Exchange Commission
(whichever first occurs) of the non-compliant financial report; and (ii) shall forfeit any other
Award that was granted hereunder during the 12-month period following such first public issuance or
filing of the non-compliant financial report and thereafter until the accounting restatement
correcting such non-compliant financial report has been filed, and (iii) shall forfeit any profits
realized from the sale of shares during the 12-month period following such first public issuance or
filing if such shares were acquired upon exercise or settlement of Awards. For purposes of this
Section 10(c), (A) if an Award subject to forfeiture has become vested or settled, the Participant
will be liable to repay the Award Gain (as defined above) to the Company, (B) “profit” shall be
calculated based on the excess of any selling price of shares over the average market price of
shares in the 20 trading days ending the day before the first public issuance or filing of the
non-compliant report, and (C) the term “misconduct” and other terms shall have meanings and be
interpreted in a manner consistent with the meanings and interpretation of such terms under Section
304 of the Sarbanes-Oxley Act of 2002.




          (d) Forfeitures Resulting from Code of Conduct Violations. Subject to the terms of an Award
agreement and any employment or similar agreement with a Participant, the forfeitures specified in
Section 10(a) will be triggered upon the Participant’s violation of the Company’s Code of Conduct,
or other similar document, at any time during the Participant’s employment by the Company or a
subsidiary or Affiliate.




          (e) Agreement Does Not Prohibit Competition or Other Participant Activities. Although the
conditions set forth in this Section 10 shall be deemed to be incorporated into an Award, subject
to the terms of an Award agreement and any employment or similar agreement with a Participant, a
Participant is not thereby prohibited from engaging in any activity specified in Section 10(b),
including but not limited to competition with the Company and its subsidiaries and Affilaites.
Rather, the non-occurrence of the Forfeiture Events set forth in Section 10(b) is a condition to
the Participant’s right to realize and retain value from his or her compensatory Awards, and the
consequence under the Plan if the Participant engages in an activity giving rise to any such
Forfeiture Event are the forfeitures specified herein. The Company and the Participant shall not
be precluded by this provision or otherwise from entering into other agreements concerning the
subject matter of Section 10(a) and 10(b).




          (f) Committee Discretion. The Committee may, in its discretion, waive in whole or in part the
Company’s right to forfeiture under this Section, but no such waiver shall be effective unless
evidenced by a writing signed by a duly authorized officer of the Company. In addition, the
Committee may impose additional conditions on Awards, by inclusion of appropriate provisions in the
document evidencing or governing any such Award.




     11. General Provisions.



          (a) Compliance with Legal and Other Requirements. The Company may, to the extent deemed
necessary or advisable by the Committee and subject to Section 11(k), postpone the issuance or
delivery of Stock or payment of other benefits under any Award until completion of such
registration or qualification of such Stock or other required action under any federal or state law
(including any applicable “Blue Sky” law), rule or regulation, listing or other required action
with respect to any stock exchange or automated quotation system upon which the Stock or other
securities of the Company are listed or quoted, or compliance with any other obligation of the
Company, as the Committee may consider appropriate, and may require any




16









 




Participant to make such representations, furnish such information and comply with or be
subject to such other conditions as it may consider appropriate in connection with the issuance or
delivery of Stock or payment of other benefits in compliance with applicable laws, rules, and
regulations, listing requirements, or other obligations.




          (b) Limits on Transferability; Beneficiaries. No Award or other right or interest of a
Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any
lien, obligation or liability of such Participant to any party (other than the Company or a
subsidiary or Affiliate thereof), or assigned or transferred by such Participant otherwise than by
will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the lifetime of the
Participant only by the Participant or his or her guardian or legal representative, except that
Awards and other rights (other than ISOs and SARs in tandem therewith) may be transferred to one or
more transferees during the lifetime of the Participant for purposes of estate-planning, and may be
exercised by such transferees in accordance with the terms of such Award, but only if and to the
extent such transfers are permitted by the Committee and the transfer is not to a third party for
value, and subject to any terms and conditions which the Committee may impose thereon. For this
purpose, unless this policy is suspended or revoked by the Committee, a Participant shall be
entitled to transfer an Award (other than Restricted Stock or any ISO or SAR in tandem therewith)
for estate-planning purposes by presenting documentation to the Company establishing the existence
of an estate plan and certifying that the Participant has consulted with counsel regarding the
proposed transfer of the Award to a trust or other appropriate transferee, provided that any offer
and sale of securities in connection with the Award shall, upon such transfer, comply with
applicable securities laws. A Beneficiary, transferee, or other person claiming any rights under
the Plan from or through any Participant shall be subject to all terms and conditions of the Plan
and any Award document applicable to such Participant, except as otherwise determined by the
Committee, and to any additional terms and conditions deemed necessary or appropriate by the
Committee.




          (c) Adjustments. In the event that any large and non-recurring dividend or other distribution
(whether in the form of cash or property other than Stock), recapitalization, forward or reverse
split, Stock dividend, reorganization, merger, consolidation, spin-off, combination, repurchase,
share exchange, liquidation, dissolution or other similar corporate transaction or event that
affects the Stock such that an adjustment is determined by the Committee to be appropriate or, in
the case of any outstanding Award, which is necessary in order to prevent dilution or enlargement
of the rights of the Participant, then the Committee shall, in an equitable manner as determined by
the Committee in its discretion, adjust any or all of (i) the number and kind of shares of Stock
which may be delivered in connection with Awards granted thereafter, including the number of shares
available under Section 4, (ii) the number and kind of shares of Stock by which annual per-person
Award limitations are (or will be) measured under Section 5, (iii) the number and kind of shares of
Stock subject to or deliverable in respect of outstanding Awards, (iv) any performance condition
based on stock price and (v) the exercise price, grant price or purchase price relating to any
Award or, if deemed appropriate, the Committee may make provision for a payment of cash or property
to the holder of an outstanding Award (subject to Section 11(k)). In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards
(including Performance Awards and performance goals and any hypothetical funding pool relating
thereto) in recognition of unusual or nonrecurring events (including, without limitation, events
described in the preceding sentence, as well as acquisitions and dispositions of businesses and
assets) affecting the Company, any subsidiary or Affiliate or other business unit, or the financial
statements of the Company or any subsidiary or Affiliate, or in response to changes in applicable
laws, regulations, accounting principles, tax rates and regulations or business conditions or in
view of the Committee’s assessment of the business strategy of the Company, any subsidiary or
Affiliate or business unit thereof, performance of comparable organizations, economic and business
conditions, personal performance of a Participant, and any other circumstances deemed relevant;
provided that no such adjustment shall be authorized or made if and to the extent that the




17









 




existence of such authority (i) would cause Options, SARs, or Performance Awards granted under
the Plan and intended to qualify as “performance-based compensation” under Code Section 162(m) and
regulations thereunder to otherwise fail to so qualify, or (ii) would cause the Committee to be
deemed to have authority to change the targets, within the meaning of Treasury Regulation §
1.162-27(e)(4)(vi), under the performance goals relating to Options or SARs intended to qualify as
“performance-based compensation” under Code Section 162(m) and regulations thereunder. In
furtherance of the foregoing, in the event of an “equity restructuring” as defined in FAS 123R
which affects the Stock, a Participant shall have a legal right to an adjustment to the
Participant’s Award which shall preserve without enlarging the value of the Award, with the manner
of such adjustment to be determined by the Committee in its discretion, and subject to any
limitation on this right set forth in the applicable Award agreement. Other provisions of this
Section 11(c) notwithstanding, in connection with any transaction in which Stock will be cancelled
or exchanged for consideration, the value of an Award to be preserved shall be based on the value
of the consideration to be received by a holder of a share of Stock immediately before the
consummation of the transaction.




     (d) Tax Provisions.




     (i) Withholding. The Company and any subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the Plan,
including from a distribution of Stock, or any payroll or other payment to a
Participant, amounts of withholding and other taxes due or potentially payable in
connection with any transaction involving an Award, and to take such other action
as the Committee may deem advisable to enable the Company and Participants to
satisfy obligations for the payment of withholding taxes and other tax obligations
relating to any Award. This authority shall include authority to withhold or
receive Stock or other property and to make cash payments in respect thereof in
satisfaction of a Participant’s withholding obligations, either on a mandatory or
elective basis in the discretion of the Committee, or in satisfaction of other tax
obligations. Other provisions of the Plan notwithstanding, only the minimum amount
of Stock deliverable in connection with an Award necessary to satisfy statutory
withholding requirements will be withheld, unless withholding of any additional
amount of Stock will not result in additional accounting expense to the Company.




     (ii) Required Consent to and Notification of Code Section 83(b) Election. No
election under Section 83(b) of the Code (to include in gross income in the year of
transfer the amounts specified in Code Section 83(b)) or under a similar provision
of the laws of a jurisdiction outside the United States may be made unless
expressly permitted by the terms of the Award document or by action of the
Committee in writing prior to the making of such election. In any case in which a
Participant is permitted to make such an election in connection with an Award, the
Participant shall notify the Company of such election within ten days of filing
notice of the election with the Internal Revenue Service or other governmental
authority, in addition to any filing and notification required pursuant to
regulations issued under Code Section 83(b) or other applicable provision.




     (iii) Requirement of Notification Upon Disqualifying Disposition Under Code
Section 421(b). If any Participant shall make any disposition of shares of Stock
delivered pursuant to the exercise of an ISO under the circumstances described in
Code Section 421(b) (i.e., a disqualifying disposition), such Participant shall
notify the Company of such disposition within ten days thereof.



     (e) Changes to the Plan. The Board may amend, suspend or terminate the Plan or the
Committee’s authority to grant Awards under the Plan without the consent of



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stockholders or Participants; provided, however, that any amendment to the Plan shall be
submitted to the Company’s stockholders for approval not later than the earliest annual meeting for
which the record date is at or after the date of such Board action if such stockholder approval is
required by any federal or state law or regulation or rule of any stock exchange or automated
quotation system on which the Stock may then be listed or quoted, or if such amendment would
materially increase the number of shares reserved for issuance and delivery under the Plan, and the
Board may otherwise, in its discretion, determine to submit other amendments to the Plan to
stockholders for approval. The Committee is authorized to amend outstanding awards, except to the
extent the proposed amended term is not then permitted under the Plan. The Board and Committee may
not amend outstanding Awards (including by means of an amendment to the Plan) without the consent
of an affected Participant if such an amendment would materially and adversely affect the rights of
such Participant with respect to the outstanding Award (for this purpose, actions that alter the
timing of federal income taxation of a Participant will not be deemed material unless such action
results in an income tax penalty for the Participant, and any discretion that is reserved by the
Board or Committee with respect to an Award is unaffected by this provision). At any time that the
Company is Public, without the approval of stockholders the Committee will not amend or replace
previously granted Options or SARs in a transaction that constitutes a “repricing,” which for this
purpose means any of the following or any other action that has the same effect:





	•	 	Lowering the exercise price of an Option or SAR after it is granted;
	 
	•	 	Any other action that is treated as a repricing under generally accepted accounting
principles;
	 
	•	 	Canceling an Option or SAR at a time when its exercise price exceeds the fair market value
of the underlying Stock, in exchange for another Option or SAR, restricted stock, other
equity, cash or other property;




provided, however, that the foregoing transactions shall not be deemed a repricing if made pursuant
to an adjustment authorized under Section 11(c). With regard to other terms of Awards, the
authority of the Committee to waive or modify an Award term after the Award has been granted does
not permit waiver or modification of a term that would be mandatory under the Plan for any Award
newly granted at the date of the waiver or modification.




          (f) Right of Setoff. The Company or any subsidiary or Affiliate may, to the extent permitted
by applicable law, deduct from and set off against any amounts the Company or a subsidiary or
Affiliate may owe to the Participant from time to time, including amounts payable in connection
with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such
amounts as may be owed by the Participant to the Company, including but not limited to amounts owed
under Section 10, although the Participant shall remain liable for any part of the Participant’s
payment obligation not satisfied through such deduction and setoff. By accepting any Award granted
hereunder, the Participant agrees to any deduction or setoff under this Section 11(f).




          (g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation (except for awards involving the transfer
of forfeitable property, such as Restricted Stock). With respect to any payments not yet made to a
Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan or
any Award shall give any such Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the creation of trusts and
deposit therein cash, Stock, other Awards or other property, or make other arrangements to meet the
Company’s obligations under the Plan. Such trusts or other arrangements shall be consistent with
the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.




          (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its
submission to the stockholders of the Company for approval shall be construed as




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creating any limitations on the power of the Board or a committee thereof to adopt such other
incentive arrangements, apart from the Plan, as it may deem desirable, including incentive
arrangements and awards which do not qualify under Code Section 162(m), and such other arrangements
may be either applicable generally or only in specific cases.




          (i) Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise determined by
the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid
cash consideration, the Participant shall be repaid the amount of such cash consideration. No
fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The
Committee shall determine whether cash, other Awards or other property shall be issued or paid in
lieu of such fractional shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.




          (j) Compliance with Code Section 162(m). With respect to any Award intended to constitute
qualified “performance-based compensation” within the meaning of Code Section 162(m) and
regulations thereunder (generally, this will apply to certain Awards granted after the Company’
stockholders, at a time that the Company is Public, have approved certain material terms of the
Plan in order to meet the requirements of Section 162(m)), the terms of Sections 7(b), (c), and (d)
shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder.
If any provision of the Plan or any Award document relating to a Performance Award that is
designated as intended to comply with Code Section 162(m) does not comply or is inconsistent with
the requirements of Code Section 162(m) or regulations thereunder, such provision shall be
construed or deemed amended to the extent necessary to conform to such requirements, and no
provision shall be deemed to confer upon the Committee or any other person discretion to increase
the amount of compensation otherwise payable in connection with any such Award upon attainment of
the applicable performance objectives in a manner that would fail to comply with applicable
regulations under Code Section 162(m).




          (k) Certain Limitations on Awards to Ensure Compliance with Section 409A.





     (i) 409A Awards and Deferrals. Other provisions of the Plan notwithstanding,
the terms of any 409A Award (which for this purpose means only such an Award held
by an employee subject to United States federal income tax), including any
authority of the Company and rights of the Participant with respect to the 409A
Award, shall be limited to those terms permitted under Section 409A, and any terms
not permitted under Section 409A shall be automatically modified and limited to the
extent necessary to conform with Section 409A. The following rules will apply to
409A Awards:




	 	(A)	 	If a Participant is permitted to elect to defer an Award or
any payment under an Award, such election will be permitted only at times in
compliance with Section 409A;
	 
	 	(B)	 	The Committee may, in its discretion, require or permit on an
elective basis a change in the distribution terms applicable to 409A Awards
(and Non-409A Awards that qualify for the short-term deferral exemption under
Section 409A) in accordance with, and to the fullest extent permitted by,
applicable IRS guidance under Section 409A, provided that any modifications to
an outstanding Award or permitted election of different deferral periods may
not otherwise increase the benefits to a Participant or the costs of such
Award to the Company (aside from administrative costs and costs relating to
the timing of tax deductions);
	 
	 	(C)	 	The Company shall have no authority to accelerate
distributions relating to 409A Awards in excess of the authority permitted
under Section 409A;





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	 	(D)	 	Any distribution of a 409A Award triggered by a Participant’s
termination of employment and intended to qualify under Section
409A(a)(2)(A)(i) shall be made only at the time that the Participant has had a
“separation from service” within the meaning of Section 409A(a)(2)(A)(i) (or
earlier at such time, after a termination of employment, that there occurs
another event triggering a distribution under the Plan or the applicable Award
agreement which distribution would comply with Section 409A);
	 
	 	(E)	 	Any distribution of a 409A Award subject to Section
409A(a)(2)(A)(i) that would be made within six months following a separation
from service of a “Specified Employee” (i.e., a “key employee”) as defined
under Section 409A(a)(2)(B)(i) shall instead occur at the expiration of the
six-month period under Section 409A(a)(2)(B)(i). In the case of installments,
this delay shall not affect the timing of any installment otherwise payable
after the six-month delay period;
	 
	 	(F)	 	In the case of any distribution of a 409A Award, subject to
any more restrictive timing rule contained in an applicable Award agreement or
other governing document, the distribution shall be made at a date (specified
by the Company without control by the Participant) not later than 74 days
after the date at which the settlement of the Award is specified to occur;
	 
	 	(G)	 	The rules applicable to 409A Awards under this Section
11(k)(i) constitute further restrictions on terms of Awards set forth
elsewhere in this Plan. Thus, for example, a 409A Option/SAR shall be subject
to restrictions, including restrictions on rights otherwise specified in
Section 6(b) or 6(c), in order that such Award shall not result in
constructive receipt of income before exercise or tax penalties under Section
409A.






     (ii) Rules Applicable to Certain Participants Transferred to Affiliates. For
purposes of determining a separation from service (where the use of the following
modified definition is based upon legitimate business criteria), in applying Code
Sections 1563(a)(1), (2) and (3) for purposes of determining a controlled group of
corporations under Code Section 414(b), the language “at least 20 percent” shall be
used instead of “at least 80 percent” at each place it appears in Sections
1563(a)(1), (2) and (3), and in applying Treasury Regulation § 1.414(c)-2 (or any
successor provision) for purposes of determining trades or businesses (whether or
not incorporated) that are under common control for purposes of Section 414(c), the
language “at least 20 percent” shall be used instead of “at least 80 percent” at
each place it appears in Treasury Regulation §1.414(c)-2.




     (iii) Distributions Upon Vesting. In the case of any Award providing for a
distribution upon the lapse of a risk of forfeiture, if the timing of such
distribution is not otherwise specified in the Plan or an Award agreement or other
governing document, the distribution shall be made not later than March 15 of the
year following the year in which the risk of forfeiture lapsed.




     (iv) Scope and Application of this Provision. For purposes of this Section
11(k), references to a term or event (including any authority or right of the
Company or a Participant) being “permitted” under Section 409A means that the term
or event will not cause the Participant to be deemed to be in constructive receipt
of compensation relating to the 409A Award prior to the distribution of cash,
            shares or other property or to be liable for payment of interest or a tax penalty
under Section 409A.



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          (l) Governing Law. The validity, construction, and effect of the Plan, any rules and
regulations relating to the Plan and any Award document shall be determined in accordance with the
Delaware General Corporation Law and, in other respects, the laws of the State of New York without
giving effect to principles of conflicts of laws, and applicable provisions of federal law.




          (m) Awards to Participants Outside the United States. The Committee may modify the terms of
any Award under the Plan made to or held by a Participant who is then resident or primarily
employed outside of the United States, or establish one or more sub-plans for such Participants, in
any manner deemed by the Committee to be necessary or appropriate in order that such Award shall
conform to laws, regulations, and customs of the country in which the Participant is then resident
or primarily employed, or so that the value and other benefits of the Award to the Participant, as
affected by foreign tax laws and other restrictions applicable as a result of the Participant’s
residence or employment abroad shall be comparable to the value of such an Award to a Participant
who is resident or primarily employed in the United States. An Award may be modified under this
Section 11(m) in a manner that is inconsistent with the express terms of the Plan, so long as such
modifications will not contravene any applicable law or regulation or, at a time that the Company
is Public, result in actual liability under Section 16(b) for the Participant whose Award is
modified.




          (n) Limitation on Rights Conferred under Plan. Neither the Plan nor any action taken
hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue
as an Eligible Person or Participant or in the employ or service of the Company or a subsidiary or
Affiliate, (ii) interfering in any way with the right of the Company or a subsidiary or Affiliate
to terminate any Eligible Person’s or Participant’s employment or service at any time (subject to
the terms and provisions of any separate written agreements), (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated uniformly with other
Participants and employees, or (iv) conferring on a Participant any of the rights of a stockholder
of the Company unless and until the Participant is duly issued or transferred shares of Stock in
accordance with the terms of an Award or an Option or SAR is duly exercised. Except as expressly
provided in the Plan and an Award document, neither the Plan nor any Award document shall confer on
any person other than the Company and the Participant any rights or remedies thereunder. Any Award
shall not be deemed compensation for purposes of computing benefits under any retirement plan of
the Company or any subsidiary or Affiliate and shall not affect any benefits under any other
benefit plan at any time in effect under which the availability or amount of benefits is related to
the level of compensation (unless required by any such other plan or arrangement with specific
reference to Awards under this Plan).




          (o) Severability. If any of the provisions of this Plan or any Award document is finally held
to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be
deemed modified to the extent, but only to the extent, of such invalidity, illegality or
unenforceability, and the remaining provisions shall not be affected thereby; provided, that, if
any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds
the maximum scope determined to be acceptable to permit such provision to be enforceable, such
provision shall be deemed to be modified to the minimum extent necessary to modify such scope in
order to make such provision enforceable hereunder. No rule of strict construction shall be
applied against the Company, the Committee, or any other person in the interpretation of any terms
of the Plan, Award, or agreement or other document relating thereto.




          (p) Plan Effective Date and Termination. The Plan shall become effective if, and at such time
as, the stockholders of the Company have approved it by the affirmative votes of the holders of a
majority of the voting securities of the Company present, or represented, and entitled to vote on
the subject matter at a duly held meeting of stockholders, which shall be the Effective Date.
Unless earlier terminated by action of the Board of Directors, the authority of the Committee to
make grants under the Plan shall terminate on the date that is ten years after the latest date upon
which stockholders of the Company have approved the Plan, and the Plan will




22









 




remain in effect until such time as no Stock remains available for delivery under the Plan and
the Company has no further rights or obligations under the Plan with respect to outstanding Awards
under the Plan.





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